Purchases of offshore residential property by Hong Kong residents have jumped fourfold in the last five months, as the political crisis at home drove more city residents to seek safe haven abroad, according to real estate brokers.
Residential property purchases that are tied to emigration incentives, such as the so-called Golden Visa offered by Greece, Portugal, Cyprus, Malta, as well as Malaysia's "My Second Home" programme - which entitle property owners to be residents, have been on the rise, said John Hu, founder and principal consultant of John Hu Migration Consulting.
"Monthly new applications and (business) have increased by four times" from May, Hu said. "We received about 1,000 enquiries for visa applications every month" since Hong Kong's anti-government protests began in June, he said. The protests were sparked by a now-withdrawn extradition bill that would have enabled the transfer of fugitives to countries that the city does not currently have an agreement with, including mainland China.
The most popular destinations for Hongkongers are Australia, Canada and the United States, he said. More than 50 applications were received for Australia, while 30 were received for Ireland, Hu said.
The trend underscores how nearly five months of unprecedented street rallies in Hong Kong has altered the purchasing and investment pattern of the city's residents, as the prices of new flats and lived-in homes had taken a beating.
Increasingly, residents are snubbing flat sales by local developers, flocking instead to property fairs organised by overseas builders who are making a beeline for their chequebooks.
"Every project sells," said David Hui, managing director of Centaline Immigration Consultants and the sales director for China and overseas property, adding that 2019 business was an improvement of up to 50 per cent from last year. "Japan, Thailand, Malaysia and Singapore are also popular. Malaysia and Singapore had been particularly popular these few months."
Centaline, a division of one of Hong Kong's biggest real estate agencies, now sells about 100 abodes overseas a month and receives inquiries from customers in their 30s to 50s seeking investment options.
"The summer holiday is traditionally the low season for buying overseas properties, but the enquiries we received this summer were 30 per cent more than that a year ago," said Mandy Wong, head of international residential at JLL in Hong Kong. "The deals we concluded since July have increased to more than double of the transactions in the first half of 2019."
Malaysia's home prices are much lower than Hong Kong's, with the starting price of a one-bedroom flat measuring 500 sq ft (46 square metres) in Kuala Lumpur at about 1 million ringgit (US$239,120), which can be leased out within two to three months due to low vacancy rates and demand by expatriates.
In contrast, one 544-sq ft flat at Kingswood Villas in the Hong Kong working class neighbourhood of Tin Shui Wai changed hands on Monday for HK$5.75 million (US$733,200), or HK$10,570 per sq ft, according to Ricacorp Properties.
Singapore and Malaysia would be safer countries with mature development and network of agents to invest in than emerging countries like Cambodia, the Philippines and Myanmar, Hui said, adding that it is important to buy from large developers and for buyers to do the necessary research before making decisions.
Hongkongers are leaving their hometown because of the high prevailing home prices and limited living space, said Hu of his eponymous agency.
"Hong Kong is the world's most expensive city (to live in)," Hu said. "The sense of oppression is great. The saying goes: Hong Kong is a good place to make money but not a good place to live."
"In Hong Kong, HK$3 million is only good for a parking space but in other countries, HK$3 million is already enough for a mansion with a parking space and a swimming pool," he said.
The quality of life has declined in Hong Kong, while the city's drop in global competitiveness rankings and reduced chance of upwards mobility may be factors that are contributing to the urge to leave, Hu said.
"The enthusiasm for emigration will continue," Hu said. "The recent problems remain unresolved by Chief Executive Carrie Lam Cheng Yuet-ngor … so the frustration in the society will persist."
Applications for the Certificate of No Criminal Conviction, a mandatory document for emigration that certifies that a person is free of criminal records, had jumped by 48.7 per cent between June and late September to 12,334, from the same period last year, according to data by Hong Kong's police.
The certificates, issued by the Hong Kong police for visa applications to visit, study or live in another country, or for adoption of children, have jumped as Hong Kong's protests deteriorated. The figure in September alone doubled from last year to 3,263.
"This is evidence that many Hongkongers truly are seeking to move overseas or at least to obtain residency overseas so that they have the option to go," said Juwai.com Executive Chairman Georg Chmiel. "While the data does not show for sure that people are applying for these police checks for their foreign visa applications, it is relatively rare to seek these documents for any other purpose."
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